TOKYO, Oct 16 (Reuters) - Japan’s Nikkei share average rose to a fresh 21-year high on Monday morning as the dollar stayed steady against the yen, while index-heavyweight SoftBank surged on news that T-Mobile and Sprint plan to merge.

The Nikkei climbed 0.6 percent to 21,284.40 in midmorning trade, and touched 21,347.07, the highest level since late 1996.

If the Nikkei finishes Monday higher, that will extend its winning streak to 10 days, the longest since May 2015.

The dollar was up 0.2 percent to 112.07 yen.

Traders said that belief that Japan’s ruling party bloc will win the general election later this month continued to underpin market sentiment, and a weaker yen raised hopes that Japanese companies will report strong earnings.

While companies will start reporting first half earnings later this month, “the current foreign exchange level suggests that manufacturers’ earnings will be bright,” said Takuya Takahashi, a strategist at Daiwa Securities.

Takahashi said Daiwa analysts expect Japanese companies to post a 14 percent rise in their pretax profits for this year under the assumption that the dollar will trade at 110 yen.

SoftBank Group Corp soared 2.6 percent after people familiar with the matter told Reuters that T-Mobile U.S. Inc and Sprint Corp plan to announce a merger agreement without any immediate asset sales, as they seek to preserve as much of their spectrum holdings and cost synergies as they can before regulators ask for concessions.

Sprint shareholders are expected to receive little to no premium in the deal, meaning that SoftBank, which controls Sprint, and other Sprint shareholders will own around or more than 40 percent of the combined company.